If a competitive firm finds that it maximizes short-run profits by shutting down, which of the following must be true?
A) p < AVC for all levels of output.
B) p < AVC only for the level of output at which p = MC.
C) p < AVC only if the firm has no fixed costs.
D) The firm will earn zero profit.
A
Economics
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In the above figure, a regulation requiring average cost pricing would force the firm to produce at output level
A) Q1. B) Q2. C) Q3. D) Q4.
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As disposable income goes up, the:
A. average propensity to consume falls. B. average propensity to save falls. C. volume of consumption declines absolutely. D. volume of investment diminishes.
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